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RIAs rank customer service as top factor when choosing custodian, says study

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As registered investment advisers (RIAs) continue to help navigate their clients through rough economic times, the support they receive from their custodian is vital, according to a study from Scottrade Advisor Services.



The 2012 Scottrade Advisor Services Study, which reports on the attitudes and behaviours of RIAs and their clients, revealed that advisers ranked the level of personalised customer service they receive as the most important factor when selecting custodial services.

Of those who listed they use more than one custodian, 52 per cent consider the firm with the best customer service and support to be their primary custodian.

“As investors’ needs change, independent financial advisers need to be prepared to meet the challenges associated with changes in investor behaviour and market conditions,” says Brian Davis, director of Scottrade Advisor Services. “Today, many advisors are looking to build deeper relationships with their custodians so that they are able to receive the back-office support they need. As RIAs work to grow their client base, Scottrade Advisor Services provides the resources advisers rely on so that they can provide specialised guidance to their clients, ensuring that they will not only sustain, but continue to grow their practice.”

According to the study, RIAs report an increase in the Boomer generation (ages 45-66) seeking professional financial advice in the past year, with 65 per cent of respondents seeing an increase in the number of Boomers walking through the doors. However, more than half of RIAs report Boomers taking less risk on their portfolios this year than in 2011.

“The conversations I’m having now with my clients are more than just a yearly check-in, they are to assure them that now is not the time to throw in the towel,” says Mark Harris of Mark Harris Services, a RIA based in Cameron Park, California, who works with Scottrade Advisor Services.

“People who saw the double-digit gains in their retirement accounts in the nineties and early 2000s thought it would last,” Harris says. “Advisers now need to sit down and spend more time with their clients and explain their options in detail. While it may not be the 10 per cent yearly return they were used to, there are still ways to have a positive return, depending on their risk tolerance.”

As more advisers are finding new ways to maintain and grow their business, the support they receive from their custodians is important, the study revealed. Nearly 60 per cent of RIA respondents say they are very satisfied with their primary custodial relationships.

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